As the 2025 bull market opens new opportunities for investors, security remains a significant concern for centralized exchanges (CEX). In January 2025, the Singapore-based exchange Phemex suffered a hack of its hot wallets, highlighting ongoing risks. This article, in collaboration with CoinEx, discusses key considerations for choosing a secure trading platform.
Learning from Past Hacks: trust, but verify
Security breaches have plagued the crypto industry since the early days of centralized exchanges. Notable incidents include the 2012 Bitcoinica hack, which resulted in the loss of 18,500 BTC, and the infamous collapse of Mt. Gox in 2014. The FTX debacle further reinforced the need for caution when selecting an exchange.
These events taught the crypto community two important lessons:
- Store assets on non-custodial wallets whenever possible.
- Carefully evaluate the security of exchanges.
Experts at CoinEx recommend considering these factors when choosing a platform:
- Age of the Exchange: Longevity suggests the platform can adapt to market changes.
- Proof-of-Reserves: Following the FTX collapse, many exchanges, including CoinEx, began publishing audit results to restore user trust.
- Transparency of Leadership: Long-term businesses are open about their management and engage with the community.
CoinEx stresses that a reputable exchange is essential not just for trading but also for asset security, especially since even non-custodial wallet users trust third parties during transactions.
CoinEx's Security Approach: a robust strategy
Since its inception in 2017, CoinEx has faced several challenges, including cyberattacks. In September 2023, the exchange’s hot wallets were breached, resulting in the loss of $70 million. However, the company responded swiftly, compensating affected users and upgrading its wallet systems to ensure greater security.
CoinEx’s hot wallets now operate using multi-party computation (MPC) technology, which adds a layer of security by requiring multiple parties to approve transactions. The platform also employs real-time monitoring to detect unusual transfers, deposits, and withdrawals.
Cold wallets: the backbone of asset security
Most of CoinEx's user funds are stored in cold (offline) wallets, which utilize multi-signature technology to safeguard assets. CoinEx has developed its own cold storage system, featuring hardware authentication and advanced monitoring for detecting suspicious activities.
Strategic partnerships and new security initiatives
CoinEx has formed key partnerships to bolster its security measures:
- ViaBTC Mining Pool: As part of the ViaBTC ecosystem, CoinEx benefits from technical support from a leading mining pool that has been active for over eight years.
- Collaboration with SlowMist: SlowMist, a leading cybersecurity company, helps CoinEx combat threats and money laundering through their strategic partnership.
- Proof-of-Reserves: CoinEx has implemented a reserve audit mechanism to ensure full transparency and verifiability of user funds.
Additionally, CoinEx has created the Shield Fund, a reserve fund replenished by 10% of trading fees. The platform also offers a bug bounty program, rewarding users up to 10,000 USDT for reporting security vulnerabilities. For more information on AI Coins, visit AI Coins.
Conclusion: a reliable choice for investors
When choosing a crypto platform, it is essential to prioritize reputation, transparency, and security practices. In a bullish crypto market, factors like support for new projects and efficient deposit/withdrawal services are also crucial.
In 2025, CoinEx has adopted a fast-listing strategy, expanded its P2P marketplace, and increased the usage of its CET token, making it a smart choice for investors during the market’s growth phase.
